Atlanta-based Aaron's Inc., the rent-to-own furniture and electronics chain, said Tuesday it will close all of its Aaron's Office Furniture stores by Sept. 30.
The closures will negatively impact earnings by $9.5 million, or about 7 cents per share
"When we sold our legacy residential rent-to-rent business in 2008 we decided to keep the 13 Aaron's Office Furniture stores," Robin Loudermilk Jr., Aaron’s president and chief executive officer, said in a statement. "At the time we believed there were still opportunities in the leasing and selling of office furniture.”
But, he said, the office furniture business is highly cyclical and hasn’t been profitable for Aaron's, so the company decided to exit the office furniture market in order to concentrate on its sales and lease ownership stores.
In 2009, the office furniture division posted revenue of $16.5 million with a pre-tax loss of $7.8 million.
In the first quarter of this year, revenue was $3.9 million with a pre-tax loss of $1.4 million. Aaron’s expected revenue would drop in the second quarter with comparable losses.
Aaron’s reduced its earnings guidance for the second quarter to a range of 29 to 33 cents, down from 37 to 41 cents. For the year, it lowered guidance to $1.36 to $1.48 per share from $1.48 to $1.60 per share.
The company will release second quarter earnings on July 26.
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